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June 2017 WINES&VINES 15 WINE INDUSTRY NEWS S an Rafael, Calif.—Win- eries and vineyards con- t i n u e d t o e x c h a n g e hands this spring, as the industry saw another round of major deals. Fast-growing Michael David Winery in Lodi, Calif., acquired a winery and small vineyard in the Alexander Valley of Sonoma County to consolidate its North Coast wine production. Silver Oak Cellars sold the property because construction is nearing completion on its new Alexander Valley winery. Earlier in April, Silver Oak made headlines by announcing its acqui- sition of Ovid Vineyards for a re- ported $50 million. Ripples from the Stagecoach Vineyard acquisi- tion (see "Gallo Buys Stagecoach Vineyard for $180M" in the May 2017 issue) also continue to be felt in Napa County, as seller Jan Krupp used a portion of the proceeds to buy Kitchak Cellars winery and 10- acre vineyard in Napa Valley. Changing places in the Alexander Valley Michael David Winery purchased Silver Oak former winery as well as a 12-acre Cabernet Sauvignon vineyard and tasting room. The winery was built in 1982 by the Ly e t h f a m i l y a n d h a d b e e n owned by Silver Oak since 1992 to produce the company's line of Alexander Valley Cabernet Sau- vignon wines. The property includes 32,000 square feet of wine-production space, 10,000 square feet of hos- pitality space and the 12 acres of vineyards, according to a statement by Zepponi & Co., which acted as the financial ad- visor to Silver Oak in the sale. The terms of the deal, which did not include any brands or inven- tory, were not disclosed. Kevin Phillips, vice president of operations at Michael David, told Wines & Vines that he let Zepponi and other brokers know he was interested in buying a winery to support Michael David's growth. In recent years he had checked out a few North Coast wineries, but Sil- ver Oak's Geyserville winery, which he described as mostly a "turn-key" facility, was the first that offered the capacity he needed. Michael David purchased about 1,500 tons of wine grapes from growers in the North Coast last year, and those grapes were vinif- ied at a few custom-crush wineries in the region or trucked back to Lodi. With the purchase of the new winery, those grapes will now be destined for one location. "We're growing like crazy, and this will hopefully consolidate North Coast supply into one location." The winery's total production is nearly 750,000 cases and has been growing at a rate of 15% per year. Phillips said about 75% of the company's sales are from the four SKUs of the 7 Deadly Zins and Freakshow brands. North Coast grapes support the winery's entire portfolio. In addition to the fermentation cellar, the Geyserville winery offers two barrel-storage rooms, a bot- tling line and space for case good storage. Phillips said his focus right now is getting the winery staffed, as Silver Oak is taking its entire team to the new winery. While the Geyserville winery does have a tasting room, Phillips said he has no plans for using it as a venue to promote Michael David's existing brands. "I'm defi- nitely not going to be coming into the North Coast and pouring Lodi wines; that's not my intention at all," he said. But now that the company has made an investment Sonoma County and the North Coast, Phil- lips is hopeful that will translate into access to more grapes, and some of those could eventually be peeled off to support a new So- noma County brand that is tied to the winery. "That's a future thing, that's not an immediate need," Phillips said. Adam Mettler, director of winemaking for Michael David Winery, will oversee operations and management for the Geyser- ville facility. 'Let Ovid be Ovid' The Ovid deal included the brand, a 16-acre vineyard and boutique winery. Though Ovid gains a new owner, winemaker Austin Peter- son will remain in place, making elevated estate wine in the same Howard Backen-designed winery overlooking Napa Valley. Silver Oak executives have said they don't anticipate changes in the wine style. The Ovid staff will stay on to assist with tours and wine pur- chases, and they will honor and maintain positions on the winery's mailing list. Jack Bittner will join as managing partner. The transaction is in the same format of many recent acquisi- tions by family wineries: They don't mess with what's working, though they often try to improve it. Silver Oak and Twomey CEO David R. Duncan said, "Our plan is to let Ovid be Ovid." Ovid's proprietors agree: "With the Duncan family as caretakers of the Ovid legacy, we believe Ovid is in a better position than ever to create wines worthy of this remarkable place," said Mark Nel- son and Dana Johnson, who bought the 22.5-acre property on Pritchard Hill in in 1998 and hired viticulturist David Abreu to plant a 16.5-acre vineyard in 2000. The Duncan family now owns about 400 acres of vineyards and buys grapes from independent growers. Ray Twomey Duncan founded Silver Oak in Oakville, Calif., in 1972. Its major Napa Val- ley vineyard is the 113-acre Soda Canyon Ranch Vineyard, and it also owns other vineyards. Silver Oak bought an 80-acre vineyard in Alexander Valley in 1987 and Sausal Vineyard and Win- ery in Alexander Valley in 2012. It bought a new 30-acre vineyard in Sonoma County's Alexander Valley last year. The Crazy Creek vineyard is on the east side of Geysers Road, near the new winery, and it is being replanted for Silver Oak's Alexander Valley Cabernet Sauvignon. Silver Oak's founding wine- maker Justin Meyer, a former monk, was legendary and intro- duced Cabernet Sauvignon aged in American oak that have garnered an avid and loyal following. Large crowds gather to buy the wines in both locations on release days. David Baron served as winemaker until he retired at the end of 2016. Nate Weis is now winemaker. Dun- can's sons David and Tim operate the business today. They bought an existing winery and created Twomey Cellars in Calistoga in 1999. Twomey also has a winery in Healdsburg to produce Pinot Noir from Sonoma, Anderson Val- ley (Mendocino County) and Santa Barbara County. The company now produces about 100,000 cases of wine. Its most expensive bottle, Silver Oak Napa Valley Cabernet Sauvignon, costs $125. Ovid only produces ALEXANDER VALLEY WINEGROWERS TOP STORY North Coast Wine Industry Deals Continue Kevin Phillips of Michael David Winery described the company's new North Coast winery as a mostly "turn-key" facility. —continued on page 17